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The Aspenleaf Proposal results in approximately $30 million of value
transferred from Arcan's debentureholders to its shareholders

It violates the fundamental rights of creditors to be repaid in full
prior to any payment being made to shareholders

If the Aspeleaf Proposal is rejected, Stornoway is prepared to work with
Arcan and its stakeholders on an alternate proposal for the benefit of
all security holders

TORONTO, Aug. 7, 2014 /CNW/ - Stornoway Portfolio Management Inc.
("Stornoway") announced today that it has voted AGAINST the currently proposed arrangement between Arcan Resources Ltd.
("Arcan") and Aspenleaf Energy Limited ("Aspenleaf") in which Aspenleaf
would acquire 87.5% of Arcan's assets. The remaining 12.5% of Arcan's
assets would be owned by a new company called Miura Energy Ltd.
("Miura"), that would be co-owned as to 6.7% by Aspenleaf and 93.3% by
Arcan's current shareholders (the "Aspenleaf Proposal").

The Ravensource Fund and The Stornoway Recovery Fund LP, both managed by
Stornoway, have significant investments in Arcan's Convertible
Unsecured Subordinated Debentures (the "Debentures"). Stornoway has
repeatedly expressed its concerns about the Aspenleaf Proposal, both
publicly and privately, in an as-yet unanswered letter to the Chairman
of Arcan's board sent immediately upon Arcan's initial press release
announcing the transaction, and in direct communications with Arcan's
President and Aspenleaf's CEO.

Stornoway has voted against the Aspenleaf Proposal for reasons that
include the following:

The Aspenleaf Proposal is entirely dependent on the Debentureholders'
willingness to forego their legal right to be repaid in full by Arcan
at a time when, based on all valuations, Arcan has the financial
capacity to honour its obligations.

The Aspenleaf Proposal violates a basic and sacrosanct capital markets
principle that prioritizes the repayment of debt obligations before
paying holders of equity. It also runs contrary to the trust indenture
under which the Debentures were issued.

Stornoway invested in Arcan's Debentures on the entirely reasonable
expectation that Arcan would repay principal in full in the event that
the company was sold to another party.

Instead, Arcan's Debenturesholders are being asked to transfer
approximately $30 million of value to its shareholders by accepting a
17.5% haircut to what they are owed under the Debentures.

Stornoway's believes that there are solutions available to address
Arcan's balance sheet challenges without opportunistic third-party
intervention like the Aspenleaf Proposal.

Stornoway will work constructively with Arcan and its stakeholders to
develop an alternative solution to repair its capital structure.

Stornoway acknowledges that Arcan has too much debt and that cash flow
is being diverted to paying interest rather than growing the business.

The Aspenleaf Proposal, in effect, unfairly shifts the burden of
corporate accountability for Arcan's current financial condition from
the board and management, where it legally and properly resides, to
Arcan's Debentureholders.

The Aspenleaf Proposal itself, through its inherent valuation of Arcan,
firmly establishes that the fair market value of Arcan's assets is more
than sufficient to allow Arcan to meet its obligations to its
Debentureholders in full, with some value left over for shareholders.

There are internal solutions to Arcan's debt burden, that require
proactive consultation with key stakeholders to improve the company's
financial condition. A proposal conceived without stakeholder
consultation, imposed on stakeholders who are being asked to forgo
their rights, and delivered to stakeholders through a company-sponsored
campaign of fear, is not the answer.

Stornoway Portfolio Management

Stornoway Portfolio Management Inc. is an employee-owned asset
management firm located in Toronto, Canada. Stornoway's investment team
has extensive experience investing in and restructuring companies that
are in financial distress. Stornoway takes a solution-oriented approach
and has a successful track record of working with management teams and
fellow stakeholders to inject the necessary capital, time and energy to
fix the root cause of financial distress, unlocking stakeholder value
in the process.